Digitalization and Tax Compliance Spillovers: Evidence from a VAT e-Invoicing Reform in Peru

By Matthieu Bellon, Era Dabla-Norris, Salma Khalid, Juan Carlos Paliza, Jillie Chang, Pilar Villena

March 18, 2022

Preview Citation

Format: Chicago

Matthieu Bellon, Era Dabla-Norris, Salma Khalid, Juan Carlos Paliza, Jillie Chang, and Pilar Villena. Digitalization and Tax Compliance Spillovers: Evidence from a VAT e-Invoicing Reform in Peru, (USA: International Monetary Fund, 2022) accessed November 8, 2024

Disclaimer: IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.

Summary

Our study uses administrative data on firm-to-firm transactions and quasi- experimental variation in the rollout of electronic invoicing reforms in Peru to study the diffusion of e-invoicing through firm networks and its effect on tax compliance. We find that voluntary e-invoicing adoption is higher amongst firms with partners who are mandated to adopt e-invoicing, implying positive technology adoption spillovers. Spillovers are stronger from downstream partners and from export-oriented firms. Firms are less likely to continue transacting with a partner who has been mandated into e-invoicing, with the effect only partially reversed if both firms adopt e-invoicing, suggesting that network segmentation may occur. Smaller firms who transact with partners mandated into e-invoicing report 11 percent more sales and pay 17 more VAT in the year that their partner is mandated to adopt e-invoicing, suggesting positive spillovers in tax compliance behavior for this subset of firms.

Subject: Financial sector policy and analysis, Positive spillovers, Revenue administration, Spillovers, Tax policy, Tax return filing compliance, Tax spillovers, Taxes, Value-added tax

Keywords: Caribbean, Downstream partner, Export-oriented firm, Firm transaction data, Positive spillovers, Spillovers, Tax compliance, Tax compliance Spillovers, Tax return filing compliance, Tax spillovers, Technology adoption spillover, Technology spillover, Technology spillovers, Transaction data, Value-added tax, VAT

Publication Details

Pages:

40
Volume:

---
DOI:

---
Issue:

---
Series:

Working Paper No. 2022/057
Stock No:

WPIEA2022057
ISBN:

9798400204876
ISSN:

1018-5941

FACTSHEETS

RESOURCES

TOPICS

Flagship Publications

Other Publications

IMF reports and publications by country

Regional Offices

All News

See Also

For Journalists

Press Center

RESOURCES

FLAGSHIPS

KEY SERIES

IMF NOTES

IMF Working Papers